Allstate CEO Dismisses Threat From Buffett’s Geico

Sept. 9 (Bloomberg) -- Allstate Corp. Chief Executive
Officer Tom Wilson, whose company lost car-insurance market
share in the last three years, said competitor Geico could
struggle to expand sales as it seeks to sell more policies at
storefronts.

Allstate has an agency force selling its namesake brand,
while its Esurance unit operates over the Internet. Geico, the
unit of Warren Buffett’s Berkshire Hathaway Inc., won customers
by focusing on direct sales and highlighting its low prices,
then added agencies under its brand to boost sales.

“We’ve been there, done that,” Wilson said today at an
investor conference in New York hosted by Barclays Plc. “It
didn’t work for us.”

Wilson, 55, said Allstate’s purchase of Esurance in 2011
helped his business “box in” Geico by appealing to different
groups of drivers with distinct brands and operations. Investors
have pushed the CEO to explain how he plans to maintain the
company’s share of U.S. auto-insurance premiums as Buffett’s
company and Progressive Corp. expand.

Allstate’s share of the U.S. personal auto market slipped
to 10 percent last year from 10.5 percent in 2009, according to
data compiled by the National Association of Insurance
Commissioners. Omaha, Nebraska-based Berkshire’s portion climbed
to 9.6 percent from 8.2 percent in the period.

Part of the decline at Allstate has come from changes made
at its homeowners business to boost profits, Wilson has said.
Allstate-brand auto policies in force rose by about 88,000 in
the three months ended June 30 from the prior quarter, the
Northbrook, Illinois-based insurer said today in a slide
presentation.

Buffett, 83, has praised Geico as one of the main reasons
for improved insurance results at Berkshire.

“Geico led the way, continuing to gobble up market share
without sacrificing underwriting discipline,” Buffett said in
his annual letter to investors in March. “When I count my
blessings, I count Geico twice.” The insurer didn’t immediately
return a voice mail left at its media line.